Malvern International plc (AIM: MLVN), the global learning and skills development partner, is pleased to announce that it has entered into a loan agreement with Boost & Co Ltd (“Boost” or the “Lender”) for working capital purposes, to repay a shareholder loan and to fund the continued development of the Group.
Subject to certain terms of the loan agreement, Boost has agreed to make available to Malvern a cash advance facility comprising two tranches:
· The first tranche (“Tranche 1”) of £2,600,000 which will be drawn in full immediately; and,
· an optional second tranche (“Tranche 2”) of up to £4,000,000, which, subject to certain conditions, will be available to the Group to fund a permitted acquisition.
Interest on the amounts drawn down will be charged as the higher of (a) 10% per annum, or (b) 8% per annum plus LIBOR, calculated on the relevant drawdown date and thereafter monthly on each repayment date. The first 12 months following each drawdown are interest only periods where no capital repayments in respect of each drawdown can be made. Thereafter, the capital (together with accrued interest) is repayable in equal instalments over 48 months.
The amounts drawn down are secured by way of debentures constituting the first fixed and floating charges over the Group’s assets in the UK and Singapore, including fixed charge security over the shares held in each English subsidiary of the Company.
An arrangement fee of 1.25% is payable on the drawn down amounts with the arrangement fee of Tranche 1 being paid on the signing of the loan agreement.
In addition, the Lender is entitled to warrants calculated at 12% of the drawn down amount divided by the 28 day average share price preceding the date of draw down (the “Strike Price”). Therefore, in connection with Tranche 1, the Company will be issuing warrants over approximately 12.2 million shares. These warrants are exercisable at the Strike Price at any time over the following 10 years from the date of drawdown. There is also an option for the warrants to be exercised on a cashless basis that would result in fewer shares being issued to satisfy the warrants.
Part of the net proceeds of Tranche 1 will be used to repay a shareholder loan of £564,000 owed to KSP Investments PTE Ltd, the Company’s largest shareholder.
Commenting on the loan, Sam Malafeh, Chief Executive at Malvern, said:
“We are pleased to have secured this loan facility from Boost which will provide additional cash resources to support the Group’s continuing growth and strategic development and enable us to accelerate rollout of some of our new products.”
Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) (“MAR”) prior to its release as part of this announcement and is disclosed in accordance with the Company’s obligations under Article 17 of MAR.